Attorney General Mayes and FTC Take Action Against Coulter Motor Company for Deceptive Pricing and Discriminatory Practices
Aug 15, 2024
PHOENIX – Attorney General Kris Mayes and the Federal Trade Commission (FTC) are taking action against Arizona-based Coulter Motor Company for engaging in practices that harm consumers, including deceptive online vehicle pricing and charging Latino car buyers more in interest and add-on products. Coulter, along with its former general manager, Gregory Depaola, will pay $2.6 million to settle the lawsuit, most of which will go towards providing refunds to affected consumers.
In the complaint announced today, the FTC and State of Arizona allege that Coulter, which operates Coulter Cadillac Tempe and Tempe Buick GMC, along with Depaola, regularly charged consumers for unwanted add-ons that they never agreed to pay for and other bogus fees. A survey found that 92 percent of consumers who purchased or leased cars from Coulter were charged for at least one unauthorized add-on or believed it was required.
“Coulter’s deceptive and discriminatory practices are unacceptable,” said Attorney General Mayes. “Arizonans should be able to buy a car without being misled or charged more because they are Latino. My office will not tolerate this kind of predatory behavior, and we will do everything we can to stop these unfair practices and protect Arizona consumers.”
“Coulter used junk fees and other illegal tactics to drive up prices for consumers, especially Latino consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue cracking down on practices that drive up prices, cheat consumers, and undercut honest sellers.”
According to the complaint, Coulter advertised car prices online at significant discounts below suggested retail prices. Consumers reported that upon arrival at the dealership, they were informed that the advertised price was not available. Instead, additional costs such as a “market adjustment” fee were added.
The add-ons included items like vehicle identification number etching, window tinting, nitrogen-filled tires, and theft recovery services – items that Coulter would deceptively tell consumers were required to purchase the car. In some cases, Coulter allegedly charged twice for the same add-ons.
The complaint also alleges discrimination against Latino consumers in vehicle transactions. On average, Latino customers paid nearly $1,200 more in interest and add-on charges than their non-Latino White counterparts due to higher interest rate markups on financing as well as higher charges for various add-on products.
The complaint charges Coulter and Depaola with violations of the FTC Act, the Equal Credit Opportunity Act (ECOA), and the Arizona Consumer Fraud Act.
Under terms of a proposed federal court order with the FTC and State of Arizona:
- Coulter and Depaola must pay a $2.6 million judgment.
- $2.35 million will be used to provide refunds.
- A comprehensive fair lending program must be established by Coulter.
The Commission voted 5-0 authorizing staff to file the complaint in U.S. District Court for the District of Arizona.
This case was handled by Alyse Meislik, Mitchell Allee from Attorney General's Office; Sanya Shahrasbi; Brian Berggren from FTC’s Bureau of Consumer Protection.
Consumers believing they have been victims can file complaints via:
- Attorney General’s website
- Phoenix Office: (602) 542-5763
- Tucson Office: (520) 628-6648
- Outside metro areas: (800) 352-8431
FTC complaints can be filed via their website or by calling (877) 382-4357.
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